Retirement village company amends fee agreements

Retirement village company amends fee agreements; residents benefit

Retirement Assets Limited (RAL), a specialist retirement village company with developments in Christchurch, Auckland and the Bay of Plenty, has amended its fee agreements in a move to strike a fairer balance for village residents and their families.

With immediate effect, the company will not charge any on-going fees to residents or their estate once a property has been vacated.

RAL Director, Graham Wilkinson, explains: “Typically, retirement villages continue to charge weekly outgoings fees after a property becomes empty. These service and maintenance fees are outlined in village contracts and are usually applied until the property has been re-sold.”

Mr Wilkinson says these on-going fees offer no benefit to residents and have the potential to cause upset, particularly where a property remains empty for a long period of time. He adds that the fees also provide little incentive for village operators to re-sell vacant properties as quickly as possible.

Another change RAL has introduced (again, favouring residents) includes that if a unit is not sold within six months, the company will add back any deferred management fees previously deducted to the sum repaid – at the same rate as they were originally deducted or amortized.

“We say that if it is good enough for us to charge a resident management fees when they live in the village, then it’s only fair that, if a property takes longer than anticipated to sell, we reimburse these fees at the same rate.”

Mr Wilkinson was sure no other company in New Zealand makes this commitment. 

“We are committed to ensuring residents within our villages experience the absolute best of everything in their retirement years – and this includes our contractual terms.”

Already, several solicitors had contacted the company and expressed a positive view about the changes.

Rob Wilson, Chairperson of the NZ Retirement Village Residents Association (RVRANZ) also welcomed the move and congratulated the company on taking a proactive stance in resolving areas of possible dispute.

“We feel that agreements can sometimes be biased towards the operator and this initiative by Retirement Assets Limited is the sort of thing that the Residents Association would like to see become mandatory.”

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